Rules change worries some drillers

Between federal regulators and private operators, there is still much deep blue sea over safety lessons from the 2010 Deepwater Horizon tragedy.

That was apparent from the words of Dale Bradford, vice president, worldwide drilling and completions for Murphy Exploration & Productions, who expressed concerns about looming federal safety rules. Bradford spoke this week to the local chapter of the American Petroleum Institute in Lafayette.

That gulf in understanding between federal regulators and critics of new drilling safety rules was apparent, too, from the Bureau of Safety and Environmental Enforcement, which has been working with industry for five years to develop and finalize safety regulations that would prevent a repeat of the Gulf of Mexico tragedy that left 11 rig workers dead, damaged Louisiana’s coast and wildlife and left a costly moratorium in place.

Bradford said the proposed rule that BSEE revealed April 17 — it could become finalized by year’s end — contained provisions that went beyond the lessons of the Deepwater Horizon incident. The changes, as presented, would make some wells undrillable because of what Bradford said were needless costs and could impose what would amount to new, de facto moratoriums on Gulf drilling until the federal demands, if they become final, could be met — if they can be met.

A BSEE spokesman this week countered that the agency’s development of the proposed new rule for well control and blowout preventers was done with the oil and gas industry’s input and review. Gregory Julian said while the industry itself has adopted new safety practices for drilling, they don’t come with the force of law, which BSEE’s proposed rule would. Also, he said, there have been incidents of safety problems since Deepwater Horizon; federal law is needed.

The April 20, 2010, incident in Macondo Prospect, 40 miles off Louisiana’s coast, began with an explosion and ended with almost three months of oil spill. BP took most of the blame, and paid tens of billions of dollars in damages.

Julian said BSEE met extensively with industry representatives, including API, between 2011 and 2015 to develop the proposed rule, and sought comment and later clarification from industry in developing the rule revealed in the spring.

“Industry was fully represented,” Julian said this week. Among the stakeholders consulted, he said, were oil and gas companies, trade organizations, operators and equipment manufacturers.

But Bradford said the three-month comment period following BSEE’s announcement of the proposed rule was too brief to allow industry representatives time to fully study the proposed rule and respond.

And while industry suggestions were included in BESE’s new rule, Bradford said that engineers’ opinions were often ignored and the proposed regulations were too broad, not taking into consideration the differences in wells. That, he said, could undermine safety at individual well sites, not enhance it.

“Most wells safely drilled since 2010 would not be drillable anymore,” Bradford said.

John Rogers Smith, a retired drilling professor at LSU, said the regulators don’t develop new rules randomly, that they usually seek out industry input. Industry and regulators routinely discuss changes.

“My understanding is that this is an evolution of what BSEE is trying to do,” Smith said. “We learned many things from Macondo. We learned real fast and under bad circumstances. … Whether the rule is good, I have no idea. But the rule is not something out of the blue.”

For his own company’s part, Bradford said, Murphy must now review and consider what assets it owns that might no longer be accessed.

API, in responding to the proposed rule in July, noted that the industry itself had published more than 100 new or revised standards for exploration and production since the explosion. The trade organization and regulators had worked together to make Gulf drilling safer than ever, API said.

Bradford said the Office of Management and Budget will have final review of the new rule, which he said will likely be implemented before President Obama leaves office in January 2017. OMB, he hopes, will weigh the costs to industry that the new rule would impose. Congress will not review the rule again before it goes into effect.

U.S. Rep. Charles Boustany, R-Lafayette, opposes pending new guidelines for those who would drill in the Gulf of Mexico.

Boustany’s six Louisiana colleagues in the House of Representatives co-signed the letter, which characterized the department’s pending regulations, developed in the five years since the Deepwater Horizon disaster, as a “one-size-fits-all” approach that would undermine safety and production. The congressmen urged Jewell to re-evaluate the rule.

“I hope some of these things change,” Bradford said this week. “Most companies have been vocal, involved.”

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